Lahiri, J.- We disposed Civil Rule No. 835 of 1981 by a consent order dated 4.4.83 whereby we ordered that the petitioner should be given the amount which the State Govt. had admitted as payable to the former on furnishing security, provided the Arbitrator had not entered upon the reference. As the Govt. had admitted at a certain point of time that the petitioner was entitled to payment of certain amount, we passed a conditional order, that the amount so admitted should be paid provided the Arbitrator had not entered upon the reference of the dispute. We also directed that the payment should be a secured one. This was to safeguard the interest of the State. We directed that the petitioner would be entitled to the amount on furnishing security. Therefore, the amount to be paid to the petitioner would be secured, i.e. if in the course of any proceedings it was found that the petitioner was liable to refund the whole or part thereof he would be bound to pay back the same to the Govt. or it would be recovered from the security. The Govt. also agreed to make the payment on the aforesaid terms and conditions. Accordingly the consent order was rendered by us. 2. On behalf of the petitioner an application has been filed for clarification or modification of our order dated 4.4.83 by fixing a time limit for payment of the amount to the petitioner. The state has filed an application and claimed that L. Raghumani Singh, Superintending Engineer, National Highway Circle, P. W. D., Manipur entered upon the reference on January 20, 1982 and as such, the Govt. is not liable to pay the admitted amount in view of our order dated 4.4.1983. 3 In our order dated 4.4.83 we did not fix any time limit for making the payment. It was a consent order and as such, we cannot alter the same unless both the parties agree to fix a time limit. Mr. N. N. Saikia, learned Government Advocate, Manipur opposes the prayer of the petitioner to fix a time limit for the payment of the amount. Under these circumstances, we hold that we cannot fix any time limit. However, we express that the purport of our order is to make the payment within a reasonable time, provided the petitioner furnishes adequate security to the State Government. 4. Mr. Saikia, learned Govt.
Under these circumstances, we hold that we cannot fix any time limit. However, we express that the purport of our order is to make the payment within a reasonable time, provided the petitioner furnishes adequate security to the State Government. 4. Mr. Saikia, learned Govt. Advocate contends that the order dated 4.4.83 is infructous and/or not operative, as an Arbitrator has been appointed who had entered upon the reference prior to 4.4.83. Mr. Saikia submits that L. Raghumani Singh. Superintending Engineer, National Highway Circle, P.W.D. Manipur was appointed by the Chief Engineer as Arbitrator of the dispute and the said Arbitrator entered upon the reference on or before January 20, 1982 prior to the making of the consent order dated 4.4.83 and as such, the Govt. is not liable to make any payment as per the consent order. We extract the letter : "To The Executive Engineer, Imphal Buildings Division, P. W. D., Manipur Sub : In the matter of arbitration between Shri Yumnara Chaoba Singh, Contractor and the State of Manipur regarding the work-construction of Kangla Sha at Bir Tikendrajit Park, Imphal. Please refer to the Chief Engineer's letter No. 141/1/CE/81/5660 dated 22.12.81. The terms of reference regarding the dispute and the counter claim against the Contractor may please be sent to the undersigned immediately. Sd/- (L. Raghumani Singh) Superintending Engineer, National Highway Circle, P.W.D Manipur" 5. Learned Govt. Advocate submits that the subject of the letter pertains to the arbitration proceedings. The Arbitrator had applied his mind and asked for the terms of reference regarding the dispute and the counter claim against the contractor, and, as such, the Arbitrator entered upon the reference on or before January 20, 1982. In support of the contention, learned Govt. Advocate relies on Dr. Babubhai Vanmali Das Mehta vs. Prabhod Pranshankar Joshi, AIR 1956 Bombay 146. 6. Did the Superintending Engineer enter upon the reference ? This is the precise question. The act of entering upon reference varies according to facts and circumstances of each case. However, to enter upon a reference an Arbitrator must take some effective steps in the Arbitration proceedings. He must accept the appointment, intimate the parties that he had entered upon the reference and desire the parties to file their respective claims.
The act of entering upon reference varies according to facts and circumstances of each case. However, to enter upon a reference an Arbitrator must take some effective steps in the Arbitration proceedings. He must accept the appointment, intimate the parties that he had entered upon the reference and desire the parties to file their respective claims. Is there anything to show that the Arbitrator had accepted the appointment and issued intimation to the parties about such acceptance after applying his mind to the terms of the reference ? The letter shows that the Superintending Engineer did not even know the terms of the reference regarding the dispute, as he called for the terms of the reference. He has not designated himself as the Arbitrator, and, rightly so. A person can accept an appointment as Arbitrator only on perusal of the terms of reference regarding the disputes. If he finds that he is not "disabled" to accept the appointment, he may accept the same. However, if he finds that he was connected with the transactions, and, as such "disabled to act as Arbitrator" he would decline to accept the appointment. In the instant case, the Superintending Engineer did not know the terms of the reference, as such, he could not have even applied his mind for the purpose of accepting or refusing the appointment. There is no indication in the letter or any other material to show that the Superintending Engineer accepted he appointment. In our opinion, generally an Arbitrator cannot accept an appointment unless he knows that he would be legally able to conduct the arbitration proceedings. In the instant case there is no indication that the Superintending Engineer accepted the appointment. No other document has been produced to show that the Superintending Engineer even accepted the appointment as Arbitrator on any date prior to 4.4.83, or, on any other subsequent date. Secondly, we find that the Arbitrator did not apply his mind to the reference. A perse n can apply his mind and enter upon the reference only on perusal of the terms of the reference. The letter addressed by the Superintending Engineer was only an inter-office communication between him and one Executive Engineer, not the Chief Engineer, the appointment authority, which does not indicate that the Superintending Engineer accepted to act as Arbitrator of had applied his mind to the terms of the reference.
The letter addressed by the Superintending Engineer was only an inter-office communication between him and one Executive Engineer, not the Chief Engineer, the appointment authority, which does not indicate that the Superintending Engineer accepted to act as Arbitrator of had applied his mind to the terms of the reference. We cannot conceive of application of the mind of an Arbitrator in respect of a reference until he peruses the terms of the reference and does some positive and effective act towards conducting the arbitration proceedings. The act of the Superintending Engineer in marking the communication to the Executive Engineer is nothing but a ministerial work done by him. These acts, in our opinion, do not amount to entering upon reference. Precisely a similar question came up before the Full Bench of the Calcutta High Court in Ramnath Agarwalla vs. Messrs Goenka & Co. AIR 1973 Cal. 253 . Similar acts were treated by their Lordships as acts which do not amount to entering upon a reference. It has been ruled that acts or actions of an Arbitrator must be such from which one can draw a conclusion that he has entered upon the reference. The application of the mind of the Arbitrator to the disputes referred to him is "sine qua non' of entering upon a reference. We extract the relevant obssrvations of their Lordships in Ramanth Agarwalla [supra] : "29. Entering on reference therefore refers to the first step that the Arbitrator takes in the reference, that is to say when he begins to deal with the reference. The Arbitrator, under the Act, may have to do various ministerial acts but the doing of any of the ministerial acts is not entering on the reference. It is only when he first applies his mind to the dispute referred to him that he enters on the reference. When, however, in a particular case, he first applied his mind to the dispute would depend on the facts and circumstances of that case. 30. There have been a number of recent decisions on this point which we may conveniently refer to. The Patna High Court in Sonevlal Thakur vs. Lachhminarain, AIR 1957 Pat.
When, however, in a particular case, he first applied his mind to the dispute would depend on the facts and circumstances of that case. 30. There have been a number of recent decisions on this point which we may conveniently refer to. The Patna High Court in Sonevlal Thakur vs. Lachhminarain, AIR 1957 Pat. 395 at P. 397 in paragraph 5 has stated that an Arbitrator does not enter upon a reference the moment he accepts to work as an arbitrator, nor can it be said that he enters upon a reference only when he actually hears the reference. An Arbitrator enters upon a reference when, after having accepted the reference, he applies his mind and does something in furtherence and execution of the work of arbitration. The exact date as to when an arbitrator enters on a reference in a particular case, however, has to be determined on the facts and circumstances of the case". It will be seen that the first stage of action of an Arbitrator begins when he starts to deal with the reference. Before he starts dealing with the reference he may have to do many ministerial acts but the doing of those ministerial acts are not entering upon the reference. Only when the Arbitrator applies his mind to the dispute referred to him, then and then only one can say that he has entered on the reference. However, the question as to when an Arbitrator enters on a reference would very according to the of facts and circumstances of each case. It cannot be ipso facto stated that an Arbitrator does enter upon reference when he accepts the appointment as Arbitrator nor can it be said that he enters upon a reference only when he actually hears the reference. He enters upon a reference when after having accepted the reference he applies his mind and does something in furtherance of the execution of the Arbitration proceedings. Therefore, the date of acceptance of the appointment may not be entering upon a reference. Similarly doing some ministerial work like asking for the terms of reference or other papers, do not amount to entering upon a reference He must apply his mind and thereafter do something in furtherance of the execution of the work entrusted on him or do something in the arbitration proceedings. 7.
Similarly doing some ministerial work like asking for the terms of reference or other papers, do not amount to entering upon a reference He must apply his mind and thereafter do something in furtherance of the execution of the work entrusted on him or do something in the arbitration proceedings. 7. Now, in the instant case, we find that there is no material to show that the Superintending Engineer accepted the appointment. Secondly, he does not even designate himself as an Arbitrator. Thirdly, we find that the Superintending Engineer rightly did not accept the appointment and designate himself as Arbitrator because the terms of the reference were not before him. Until he got the terms of the reference he could not have declared himself as an able person to accept the appointment. He could have decided the question of his ability or disability only upon receipt of the terms of the reference. Therefore, we have no material to hold that the Superintending Engineer, accepted to act as Arbitrator in the dispute. Fourthly, we find that he could not have applied his mind to the reference because the terms of the reference of the dispute were not at all before him. Fifthly, we find that there is no material to show that he having applied his mind to the terms of reference did anything to further the execution of the working of the arbitration proceedings. Under these circumstances, we are unable to hold that the Arbitrator entered upon the reference merely on the basis of the letter dated January 20, 1982. This apart the State has no other material. 8. There is another facet, which we cannot overlook. If we hold that the Superintending Engineer entered upon the reference on 20.1.1982, any award to be made by him would be barred by limitation in view of Section 3 of the Arbitration Act, 1940, as there is no material before us that there was any application for extension, of time to make the award before any competent court. However, our firm opinion is that the Arbitrator did not enter upon the reference on 20.1.1982, as claimed by Mr. Saikia. 9. There remains one other consideration the decision referred by Mr. Saikia, that is, Dr. Babubai Vanmalidas (supra). We fail to see how the principles enunciated in the decision helps Mr. Saikia. On 14.12.53, the petitioner Dr.
However, our firm opinion is that the Arbitrator did not enter upon the reference on 20.1.1982, as claimed by Mr. Saikia. 9. There remains one other consideration the decision referred by Mr. Saikia, that is, Dr. Babubai Vanmalidas (supra). We fail to see how the principles enunciated in the decision helps Mr. Saikia. On 14.12.53, the petitioner Dr. Babubhai and Respondent signed a submission paper to two persons, who were appointed Arbitrators. The petitioner and the Respondent filed their respective statements before the Arbitrator who held meeting on 5.1.54. Therefore, one of the Arbitrators left Bombay. So on 10.3.54, the respondent served a notice on the petitioner dated 6.3.54 that one of the Arbitrators had negligently left the work as Arbitrator, and, as the petitioner had failed to appoint another in his place, the other Arbitrator would act as the sole Arbitrator. On 11.3.54, a notice was served to the petitioner about the meeting to be held by the sole Arbitrator on March 14, 1954, in connection with the arbitration proceedings. However, the said meeting was adjourned and the first meeting before the sole Arbitrator was held on March 28, 1954. The minutes of the Abritrator which were filed clearly reflected that on 28.3.54, the petitioner desired an adjournment for a couple of days to engage his legal adviser as the other side had engaged one. So the proceedings were adjourned to 30.3.54. Thereafter, the petitioner filed an application to the High Court for setting aside the appointment of the sole Arbitrator. Pending disposal of the application nothing further was done in the arbitration proceedings. The petition was dismissed on 19.7.54. Thereafter the sole Arbitrator fixed the next date of meeting on 24.7.54, which was adjourned till 28.7.54 and ultimately an award was made on 20.11.54. The petitioner filed an application for setting aside the award on various grounds including that the award was made beyond the time allowed by the law which came up before the learned Single Judge who held that U/s. 3 of the First Schedule to the Arbitration Act, 1940, an award must be made within 4 months "after entering on the reference". Therefore, the sole question was, when did the sole Arbitrator enter on the reference ?
Therefore, the sole question was, when did the sole Arbitrator enter on the reference ? The petitioner urged that the Arbitrator "entered upon the reference when he accepted the appointment or in any event that be did so on and from 28.3.54 when he held the first meeting", whereas the respondent claimed that the sole Arbitrator entered upon the reference on 28.7.54 when he heard both the parties on merits. Learned Single Judge referred to Iossifoglu vs. Coumantaros, (1941), 1 KB 396, wherein Court of appeal has held that an Arbitrator enters upon a reference as soon as he accepts his appointment and communicates the parties to the proceedings about the reference. Learned Single Judge held that the contention of the respondent could not be accepted that only on the date on which the Arbitrator hears on merit can be the date of entering on the reference. Learned Single Judge also referred Baker vs. Stephens, (1867) 2 QB 523 and relied on the minority opinion of Cockburn, C. J. The majority view went against Cockburn, C. J. 's view. However, the majority view was over-ruled by the court of appeal in Iossifoglu (supra). Learned Single Judge relied on Nand Kishore Goswami vs. Bally Co-operative Credit Society Ltd. AIR 1943 Cal. 255, a Division Bench dicision of the Calcutta High Court wherein it was held that an Arbitrator could not be said to have entered on a reference the moment he was appointed an Arbitrator. We extract the relevant observation of B. K. Mukherjee,J. "It is necessary that he must actually begin the work in the presence of the parties or with notice to them before he can be said to have entered on the reference". Therefore, mere appointment or acceptance of the appointment are not entering upon the reference. The Arbitrator must begin the work of arbitration in the presence of the parties, after serving notice to them, before he can be said to have entered on a reference. A number of other decisions were relied upon by the learned Single Judge, who held that, on 28th March, 1954 and or 30th March, 1954 there were proceedings before the Arbitrator gave directions to the parties as to the future progress of the arbitration proceedings, and, accordingly on those dates he entered on the reference.
A number of other decisions were relied upon by the learned Single Judge, who held that, on 28th March, 1954 and or 30th March, 1954 there were proceedings before the Arbitrator gave directions to the parties as to the future progress of the arbitration proceedings, and, accordingly on those dates he entered on the reference. Accordingly, learned Single Judge held that the award made by him on 20.11.54 was out of time. We are of the opinion that the decision is on all fours with the view that we have taken. We respectfully agree with the principles of law enunciated in Ramnath Agar w alia (supra) and hold that on the material namely, the letter dated January 20, 1982 we cannot hold that the Arbitrator either accepted the reference of applied his mind or did anything in furtherance of the arbitration proceedings : he did not even apply his mind to the reference. Under these circumstances, we cannot accept the contention of Mr. Saikia, learned Govt. Advocate. The plea of the State therefore is rejected. 10. We express that it is highly desirable for the State Govt. to honour their stand taken before this court on 4.4.82. The amount admitted by them may be paid to the petitioner on furnishing adequate security and they should not create any impediment to delay the payment as contained in our order dated 4.4.83. Accordingly, we clarify our order dated 4.4.83 on the basis of the contention of the respective parties. The order dated 4.4.83 stands. 11. With these observations and direction we dispose of the petition. However, there will be no order as to costs. This disposes of the Misc. Case. 12. At this stage Mr. Saikia, learned Govt. Advocate prays for two months' time for the Govt. to make payment to the petitioner. Mr. J. P. Bhattacharjee, learned counsel for the petitioner submits that the petitioner is suffering from cardiac disorder and lying helplessly ill. Considering these facts, the State Govt. shall undoubtedly make the payment as expeditiously as possible, of course if the petitioner furnishes adequate security for the amount to be paid.